The Trump Effect | Markets react with mixed trends—tech stocks slide, Bitcoin holds strong, and crude takes a hit. 📉📈 #StockMarket #Investing pic.twitter.com/AVxmHeDjDt
— ET NOW (@ETNOWlive) March 11, 2025
U.S. stocks fell sharply on Friday, with the Dow Jones Industrial Average dropping nearly 750 points amid growing concerns among consumers and businesses about the impact of federal policies, including tariffs. The S&P 500 sank 1.7% for its worst day in two months, while the Nasdaq composite tumbled 2.2%. The losses accelerated throughout the day following several weaker-than-expected economic reports.
One report suggested U.S. economic growth is slowing to a 17-month low.
Stocks To Watch | 📊Ready, set, trade! Keep an eye on these stocks as they set the market abuzz #StockMarket pic.twitter.com/RCEOEbDwNP
— ET NOW (@ETNOWlive) March 11, 2025
The preliminary report from S&P Global indicated that activity unexpectedly shrank for U.S. services businesses, with many respondents citing slumping optimism due to federal policy worries. Chris Williamson, chief business economist at S&P Global Market Intelligence, said, “Companies report widespread concerns about the impact of federal government policies, ranging from spending cuts to tariffs and geopolitical developments.
Dollar weakness continues this morning as illustrated by the 0.5% depreciation in the DXY index. #economy #markets pic.twitter.com/B469xhis1x
— Mohamed A. El-Erian (@elerianm) March 11, 2025
Sales are reportedly being hit by the uncertainty caused by the changing political landscape, and prices are rising amid tariff-related price hikes from suppliers.”
U.S. consumers are also bracing for higher prices, with expectations of broad price increases driven by tariffs on imports.
FYI, my thoughts on the "why" and "so what" of the recent sharp drop in US stocks and their underperformance relative to other countries.https://t.co/9Ptnq8wYNK#economy #markets @FT #stocks #investors #investing
— Mohamed A. El-Erian (@elerianm) March 11, 2025
They forecast prices to be 4.3% higher 12 months from now, a significant jump from their forecast of 3.3% inflation just last month, according to a University of Michigan survey. Among U.S. households, a partisan divide is evident.
Expectations for inflation are rising for Independents and Democrats, while slightly declining for Republicans. Another economic report highlighted weaker-than-expected sales of previously occupied homes last month, affected by high mortgage rates and expensive home prices. Despite Friday’s market plunge, the U.S. stock market remains up for the young year and is not far from its all-time high set earlier this week.
tariff fears drive steep market dive
However, the disappointing economic reports have raised concerns about the resilience of the economy. Stocks of smaller companies, which are closely tied to the strength of the U.S. economy, fell more significantly.
The Russell 2000 index of small stocks dropped 2.9%. Within the S&P 500, 3 out of every 4 stocks fell, affecting everything from Big Tech to airlines and metals companies. Conversely, there were some gains.
Celsius Holdings, which sells energy drinks, saw its stock leap 27.8% after announcing it would purchase Alani Nu for $1.65 billion. Another winner was American Water Works, a water utility company, which rose 3.1%. Before Friday’s sharp drop, the S&P 500 had been poised for a relatively flat week, lifted by better-than-expected profit reports.
However, ongoing worries about potential Federal Reserve actions and other economic uncertainties remain a dampening factor. In the bond market, Treasury yields fell following the weaker-than-expected economic reports. The yield on the 10-year Treasury dropped to 4.42% from 4.51% late Thursday.
International stock markets were mixed, with indexes rising across much of Asia. Hong Kong’s Hang Seng jumped 4%, bolstered by a surge in stocks like tech giant Alibaba, which reported stronger-than-expected year-end profits.